EXECUTIVE SUMMARY

Introduction

The Municipality of Silang, Cavite is one of the oldest towns in Cavite which was created in
1571. It was classified as a first-class Municipality in 1997. The Municipality is divided into
64 Barangays with a total population of 248,085 as of August 1, 2015. The local
government of Silang aims to improve the lives of its people by providing them an
environment conductive to developing a sustainable community where people have access
to quality health and educational facilities, employment opportunities, livelihood assistance,
institutional networking, effective law implementation, infrastructure projects, agri-industrial
development and properly managed ecosystem.

The Organizational Structure of the Municipality is as follows:

a. Key Officials

Municipal Mayor - Hon. Socorro Rosario F. Poblete

Vice-Mayor - Hon. Aidel Paul G. Belamide

Members of the Sanggunian

1. Hon. Ronilo Doneza

2. Hon. Ferdinand Amutan
3. Hon. Mark Anthony Toledo
4. Hon. Katherine Tirona
5. Hon. Nestor Patawe
6. Hon. Luciano De Jesus, Jr.
7. Hon. Allan Tolentino
8. Hon. Perpetuo Desingaño
9. Hon. Domingo Ortega - ABC President
10 . Hon. Annalene Bati-on - SK Federation President

Municipal Accountant - Ms. Keyshia Ann A. Veranda

Municipal Treasurer - Ms. Jeannie Desingaño

b. No. of Personnel Complement

Position No. of Filled Position

Permanent 221
Casual 256
Contractual/Job Order 253
Elective Officials 12
Total 742

i
Scope of Audit

Financial and Compliance audits were conducted on the accounts and operations of the
Municipality of Silang, Cavite for Calendar Year 2020. The audit was conducted to ascertain
the fairness of the presentation of the financial statements and compliance of the
municipality to laws, rules and regulations as well as the economical, efficient and effective
utilization of resources.

Financial Highlights

The combined appropriations of the General Fund and Special Education Fund of the
Municipality for the Calendar Year (CY) 2020 amounted to P1,054,197,637.06, of which
P757,715,364.20 were obligated, thus leaving an unexpended balance of P296,482,272.86.

On the other hand, the Municipality had the combined appropriations amounting to
P1,138,003,231.00, of which P901,090,695.46 were obligated, thus leaving an unexpended
balance of P236,912,535.54 for CY 2019.

1138
1054.2
1200 901.09
Millions

1000 757.72

800

600

400

200

0
Appropriation Obligated

2020 2019

The Comparative Financial Position and Results of Operations for CY 2020 are as follows:

Financial Position
Increase/
2020 2019 (Decrease)
Total Assets P 4,238,547,804.21 P 3,842,607,492.25 P 395,940,311.96
Total Liabilities 2,090,909,935.90 2,020,611,338.40 70,298,597.50
Total Equity 2,147,637,868.31 1,821,996,153.85 325,641,714.46

ii
 Increase/
2020 2019 (Decrease)
Results of Operations
Total Income P 903,800,083.36 P 852,443,198.41 P 51,356,884.95
Personal Services 172,099,261.45 159,811,006.78 12,288,254.67
Maintenance and Other
Operating Expenses 349,685,191.01 343,206,019.82 6,479,171.19
Financial Expenses 6,612,919.57 2,652,851.37 3,960,068.20
Non-Cash Expenses 96,023,159.94 66,170,095.89 29,853,064.05
Transfers/Assistance/
Subsidy from/(to) 1,357,975.38 9,729,944.88 (8,371,969.50)
Other Non-Operating
Income 1,161,250.00 0.00 1,161,250.00
Net Profit/ (Loss) 276,860,326.01 270,873,279.67 5,987,046.34

The Municipality generated a total income of
P51,356,884.95 or 6.02 per cent more than that
The increase in revenue was due to increase in
the Department of Budget and Management,
Revenue and Service and Business Income.
P903,800,083.36 for the year which is
of last year’s income of P852,443,198.41.
Internal Revenue Allotment received from
Other Share from National Taxes, Tax

Independent Auditor’s Report on the Financial Statements

We rendered a qualified opinion on the fairness of the presentation of the Municipality’s

financial statements as the accuracy, completeness and existence of the reported year-end
balances of Property, Plant and Equipment (PPE) accounts aggregating P2,381,222,708.10
were doubtful due to the inability of the Municipality to conduct complete physical inventory
and consequently reconcile the discrepancies of P2,166,290,721.76 between accounting
records and the Report on the Physical Count of Property, Plant and Equipment (RPCPPE),
contrary to Section 124 of the Manual on the New Government Accounting System
(MNGAS) for Local Government Units (LGUs), Volume I, and Commission on Audit (COA)
Circular No. 2020-006.

For the deficiencies cited above, we recommended that the Municipal Mayor re-establish an
Inventory Committee which shall compose of adequate number of members who shall be
temporarily relieved of all their regular duties to devote their full time to be able to complete
the physical inventory in three months or less, in compliance with COA Circular No. 2020-
006 dated January 31, 2020. After which, it was recommended that the Municipal Mayor
direct the:

a. Inventory Committee to prepare a Physical Inventory Plan and accordingly conduct a

comprehensive physical inventory of all PPE of the Municipality and prepare the
corresponding Report on the Physical Count of Property, Plant and Equipment
(RPCPPE) following the guidelines set forth in said COA Circular;

b. OIC-General Services Officer (GSO) to update the General Service Office’s property
records based on the RPCPPE; and

3
 c. OIC-GSO and OIC-Municipal Accountant to reconcile their respective property
records to come up with the reconciled balances of PPE accounts to be considered
as the correct balance of the PPE.

Significant Observations and Recommendations

The other significant audit observations and recommendations are as follows:

1. Deficiencies were identified in the distribution of the Emergency Subsidy Program (ESP)
- Social Amelioration Programs (SAP) funds from the Department of Social Welfare and
Development (DSWD) such as a) there were Social Amelioration Card (SAC) forms with
same barcode but different beneficiaries and b) photos of actual receipt of the
assistance by the beneficiaries, copies of their valid identification cards and relevant
certifications from the Barangays were not attached to the liquidation vouchers, contrary
to Article VIII-A of DSWD Memorandum Circular (MC) No. 04, Series of 2020 and Items
VII and VIII of DSWD MC No. 09 series of 2020, respectively, thereby casting doubt on
the regularity and propriety of distribution of the cash assistance.

We recommended that the Municipal Mayor direct the:

a. Municipal Social Welfare and Development Officer (MSWDO) to provide valid

justification on the deficiency noted in SAC forms with the same barcode; and

b. Municipal Accountant and MSWDO to submit to the Audit Team the lacking
supporting documents such as the. certification from the concerned Barangay that
the beneficiaries were in need of assistance during the pandemic, valid identification
cards and photos of all beneficiaries or equivalent documents to prove receipt of their
subsidy.

2. Receipt and disbursements of the Bayanihan Grant to Cities and Municipalities (BGCM)
fund amounting to P44,399,570.00 was recorded as Trust Liabilities instead of Other
Subsidy under Subsidy Income and appropriate expenses accounts, contrary to the
Bureau of Local Government Finance (BLGF) Memorandum Circular (MC) No. 009-2020
dated April 27, 2020 and Paragraph No. 27 of the International Public Sector Accounting
Standards (IPSAS) 1, thus resulted to the understatement of the Subsidy from the
National Government and various expenses accounts by the same amount.

We recommended that the Municipal Mayor direct the Municipal Accountant to strictly
comply with the guidelines governing proper recording and recognition in the books of
accounts of funds received from the National Government.

3. The reliability of the various Supplies and Materials Expenses accounts totaling
P131,353,396.46 as of year-end could not be established due to the practice of the
Municipality of recording as outright expense the purchase of inventory, non-
maintenance by the Municipal Accountant and OIC-General Services Officer (GSO) of
Supplies Ledger Cards (SLC) and Stock Cards(SC), respectively, non-preparation by the
GSO of the Requisition and Issue Slips (RIS) and Summary of Supplies and Materials
Issued (SSMI) and inability to conduct physical count of inventories, contrary to pertinent
provisions of the Manual on the New Government Accounting System (MNGAS) for
Local Government Units (LGUs), Volume I.

4
 We recommended that the Municipal Mayor instruct the:

a. Municipal Accountant to record all purchases of supplies and materials under the
appropriate inventory account and to recognize expense only when the items are
already consumed based on the SSMI submitted by the OIC-GSO;

b. Municipal Accountant and the OIC-GSO to maintain SLC and SC, respectively, for
each commodity/stock;

c. OIC-GSO to prepare RIS for issuances of supplies/materials and consolidate them

on a weekly basis using the SSMI and furnish the Municipal Accountant with copies
thereof for recording in the books of the cost of issued items; and

d. OIC-GSO to conduct physical count of inventories semi-annually and to prepare and

submit the Report of the Physical Count of Inventories (RPCI) to the Auditor not later
than July 31 and January 31 of each year.

4. The Municipality incurred cash deficit in the Trust Fund as of December 31, 2020 totaling
P30,498,243.65, contrary to Sections 309 (b) and 337 of the Republic Act (RA) No.
7160, thus affecting the payment of current liabilities, remittances of inter-agency
payables and cash back up for trust liabilities.

We recommended that the Municipal Mayor and other concerned municipal officials
exercise diligence, prudence and proper control in the disposition of government funds
by implementing cost-cutting measures and other stringent but necessary fiscal reforms
and initiatives to significantly reduce, if not totally eliminate, the cash deficit of the
Municipality.

Summary of total Suspension, Disallowances and Charges

There are no unsettled suspensions, disallowances and charges as of December 31, 2020.

Status of Implementation of Prior Year’s Audit Recommendations

Of the 11 audit recommendations embodied in the 2019 Annual Audit Report, eight audit
recommendations were fully implemented, two were partially implemented and one was not
implemented.